HR Policy Urges EEOC to Significantly Modify Its Proposed Wellness Program Rule, Notes Threat to Employee Engagement

June 19, 2015

This week, the Association filed comments urging the Equal Employment Opportunity Commission to significantly modify its proposed wellness rule to clarify that employers can offer financial incentives up to 30 percent for family coverage and up to 50 percent for smoking cessation programs that screen for tobacco use, and to remove subjective and ill-defined requirements that will discourage innovation in wellness program design and increase litigation.  HR Policy's comments on the Commission's proposed ADA wellness rules note that member companies have a long-standing commitment to creating a culture of health and wellness in the workplace, and a critical component of successful wellness programs is a high degree of employee engagement.  The ability to fully utilize the financial incentives allowed under the ACA is vital to that engagement.  The Association’s comments also noted:

  • Although the proposed rule would restrict the ability of employers to administer gated health care plans, the EEOC does not have the statutory authority under the ADA’s insurance safe harbor provision to impose such restrictions; and
  • The EEOC’s blanket rejection of a key 11th Circuit decision involving the ADA's "safe harbor" (Seff v Broward County) is inappropriate, and the agency should recognize that some wellness plans may fall within that provision.
The comments also note that the EEOC does not have the statutory authority to regulate when a wellness program is “reasonably designed to promote health or prevent disease” and that adding subjective and ill-defined requirements to the definition will discourage innovation and increase litigation.  The Association also strongly urged the EEOC to not adopt an affordability standard under the ADA’s requirement that wellness programs be "voluntary," as it would significantly complicate the administration of those programs and make it impossible for employers to be sure they are not violating the ADA. The EEOC’s proposed rule is the first of two expected to be issued this year.  A proposed rule on how wellness programs should be regulated under the Genetic Information Nondiscrimination Act is expected sometime this summer.